ALBANY, NY - Capital Region multifamily projects kept developers busy last year, slowly pulling them out of the nearly decade-low lull they fell into in 2006, according to statistics recently released by the U.S. Census Bureau. Even as the slowdown in existing home sales continued to crimp new home sales, builders last year received 2,700 building permits from municipalities in the Albany-Troy-Schenectady area. That marked a 200 permit or 8 percent improvement from the preceding year.
The local residential construction market fared better than the nation's, which last year saw municipalities issue 24 percent fewer permits, totaling 1.4 million. After peaking in 2005 at 3,600, Albany area permit activity plunged to 2,500 a year later, the lowest level since 1997. However, it might be too early to say local developers have seen the worst of the housing slump pass because permit growth was driven mostly by condominium or rental units. The development of those units can fluctuate greatly in small metropolitan areas, said Bernard Markstein, the vice president of forecasting and analysis for the National Association of Home Builders, a Washington trade organization. "It bucks the national trend that the permits went up, but I wouldn't make much of that because it was in multifamily," said Markstein.
Developers need to secure the permits from municipalities prior to breaking ground. The Census Bureau compiles definitive numbers and releases the permit activity data each May. Over the year, builders received 1,600 single-family home permits, down 200 or 11.1 percent from 2006. Multifamily permits jumped by 500 or 83.3 percent to 1,100. Much of that multifamily development likely stemmed from condominium projects tailored for baby boomers and young professionals in Albany, Cohoes and Saratoga Springs.
Capital Region Builders & Remodelers Association Executive Officer Pam Krison said the 2007 data adds credence to the Albany trade organization's "Building Momentum" marketing campaign, which started in March. The campaign aims to allay consumers' worries about the local economy, saying it is faring better than the nation's. The campaign also encourages people to move into or remain in the region.
The NAHB predicts the nation's housing slump will bottom out this year and start to improve in 2009. Markstein said he does not expect the Albany area's robust multifamily activity to carry over into 2008 because the local population is not growing at a pace quick enough to keep pace with development. "You don't want to get ahead of yourself," Markstein said. But Krison said demand for condominiums is sufficient to keep multifamily development going strong. "We do expect the multifamily to remain the same. Although it took a big jump, it was more of a pent-up demand," Krison said.
Source: DailyGazette.com